State agencies face 10 percent budget cut

Gov. Chris Gregoire’s budget director, saying the economic outlook is “bleaker and bleaker,” on Monday told state agencies to prepare for up to $1.7 billion reduction to next year’s operating budget.

That means department heads need to plan for a budget cut of up to 10 percent.

In an interview with seattlepi.com, Budget Director Marty Brown wouldn’t speculate as to where the cuts might come from, saying he first wanted to hear from state managers about further reductions.

“It was difficult for them a year ago, it was difficult for the Legislature…it’s going to be very painful,” Brown said.

In memo to directors, he wrote: “In June, the state reduced its General Fund-State (GF-S) revenue forecast for the current biennium to reflect concerns about the national economy, high gasoline prices, and supply chain disruptions from Japan. Although the forecast continues to indicate improvement this biennium, the near-term economic outlook has weakened since June. … Therefore, the Governor is asking agencies to prepare for possible cutbacks by submitting 5 percent first-priority reductions and a second 5 percent for a total of 10 percent in GF-S reduction options as part of their 2012 supplemental budget requests.” Marty Brown wrote in a memo.

Earlier this year the state Legislature passed a $33 billion spending plan for 2011-13. At that time lawmakers dealt with a $5 billion deficit through spending cuts and transfers. Among the cuts were $500 million to higher education as well as deep reductions to health care and K-12 education.

Brown said he believed the next time the state estimates future revenues, on Sept. 20, that there would be more bad news.

“I don’t have any reason not to think it’s going to be bleak, yeah. I look at the uncertainty surrounding the debt limit decisions, the uncertainty about what cuts may be coming, everything that’s going on in the market…it’s just inevitable that it’s going to go down,” he said.